Govt. Urged to Return to Higher Import Tariffs

VIET NAM – Overly low import taxes are being blamed for the increased imports of meat, eggs and milk recently.

19 September 2008

4 minute read

Offical sources report that the Ministry of Agriculture and Rural Development has asked the government to discourage the import of meat and animal products which can be made domestically.

Nguyen Xuan Duong, Deputy Head of the Livestock Husbandry Department under the Ministry of Agriculture and Rural Development (MARD), said that imports of meat and dairy products have become worryingly high recently and are threatening local production.

He went on to say that local production is facing big difficulties due to lack of capital, epidemics and higher feed prices. Meanwhile, local farms cannot sell their products due to the massive imports.

According to Mr Duong, the prices of poultry meat and eggs have decreased, with chicken selling at VND23-24,000 per kilo and eggs at VND1,400-1,500 each.

Professor Nguyen Dang Vang from the Livestock Breeding Institute also said that Vietnam has imported too much meat and poultry meat so far this year, which has given local farmers big difficulties.

He said that 118,000 tonnes of meat of different kinds were imported into Vietnam in the first eight months of the year, while Vietnam's meat exports have never reached that level. If the current import growth rate is maintained, Vietnam will import 200,000 tonnes of meat this year.

He added that one of the reasons behind the high imports is the decreased import tax.

Professor Vang said that he well understands that the import tax was cut by the government in an effort to restrain inflation and ensure sufficient supplies for domestic consumption. However, the import tax should be high enough to encourage local production.

In fact, the government has cut taxes on this group of goods sooner than the deadlines stipulated in the country’s World Trade (WTO) commitments.

Under its WTO commitments, Vietnam does not have to cut the tariff on beef to 14 per cent until 2012 but it has reduced the tax rate to 12 per cent already. Vietnam only has to cut the tariff on fresh and frozen pork to 25 per cent but it has lowered the tax rate to 20 per cent already.

Vietnam does not have to cut tariffs on chicken, duck and wild goose meat but it reduced the tariffs from 40 per cent when it officially joined the WTO in early 2007 to 12 per cent. Under its WTO commitments, the import tax on milk materials must be cut to 18% in 2009, while Vietnam is imposing 10 per cent on the imports now. The import tax on eggs has also decreased from 80 per cent in early 2007 to 20 per cent.

MARD thinks that Vietnam should follow the commitments it made when joining the WTO on cutting taxes on meat and poultry meat and related products.

According to the Livestock Husbandry Department under MARD, Vietnam exported animals and animal products worth $80 million in the first seven months of the year, while it imported products worth $321.8 million. These included milk and cream ($187.6 million), poultry meat ($82.7 million), pork ($12.5 million) and beef ($17.2 million).